If you run your own business it’s important that you know what tax reliefs and other financial allowances are available from HMRC.
This page offers a summary of things you might want to explore to help you legitimately keep more of what you earn.
It’s really important to stay on top of your tax affairs – make sure you pay what you owe as soon as you can and talk to us as soon as possible if you can’t pay.
If you are self-employed or run a business
Make sure you explore the various allowances and reliefs that could be available to you.
Tax-deductible business expenses
If you’re self-employed, your business will have various running costs. You can deduct some of these as part of your annual tax return, to work out your taxable profit as long as they’re allowable expense.
The list of tax-deductible expenses is long but includes things like office stationery, insurance and bank charges, and even heating and lighting for your office or business premises, including home offices.
Research and Development tax credits
If your company is involved in innovative projects in science or technology you may be eligible to claim Research and Development (R&D) reliefs. These can be claimed by companies researching or developing an advance in their field. They can even be claimed on unsuccessful projects.
Gift Aid
Companies (and unincorporated associations) can claim tax relief for qualifying donations paid to charities (bodies or trusts accepted as charities for UK tax purposes).
Business rates relief
Some properties are eligible for discounts from the local council on their business rates. This is called ‘business rates relief’.
Corporation Tax relief
You can deduct the costs of running your business from your profits before tax when you prepare your company’s accounts. This could include things like buying machinery or tools for your business.
Pre-trading expenses
If you are in the process of setting up a new business you may be able to claim back some of the expenses you incurred before you started trading through your first tax return.
Reclaiming VAT
If you are a VAT-registered business you can reclaim VAT on items you buy for use in your business. Do this in your VAT return.
Budgeting to pay your tax bill
You can use our Budget Payment Plan service to make regular weekly or monthly payments towards your next tax bill. You must be up to date with your previous Self Assessment payments and you can decide how much to pay each week or month.
Set up your plan using your HMRC online account. Go to the Direct Debit section and choose the ‘set up a budget payment plan’ option when filling in the Direct Debit form.
The Patent Box scheme
You can use the Patent Box to reduce your Corporation Tax on profits. Check if your company can pay a reduced rate of 10% Corporation Tax if it exploits patented inventions and innovations.
If you employ others
There are several ways HMRC can help and support you if you employ people.
Employment Allowance
You may be able to claim Employment Allowance which allows eligible employers to reduce their annual National Insurance liability by up to £5,000.
Hiring an apprentice
If you hire an apprentice, you may be eligible for further support from the government.
Hiring a veteran
From April 2021, anyone hiring a former member of the UK Armed Forces in their first year of civilian employment can apply a zero-rate of secondary National Insurance contributions (for that employee) for up to 12 months.
Allowable tax expenses
If you’re an employer and provide expenses or benefits to employees or directors, you might need to tell HMRC and pay tax and National Insurance on them.
Examples of expenses and benefits include:
- company cars
- health insurance
- travel and entertainment expenses
- childcare
Further help and information
File your Self Assessment return early
You don’t have to wait until January to file your Self Assessment tax return. You can do your tax as soon as the tax year ends and submit it at a time that suits you. Filing early has a few benefits; it might help you manage your tax bills or your financial planning for the year by finding out how much you owe, so you can plan your payments and if you’re owed a refund you’ll get it sooner.
Using a tax adviser or agent
If you’re thinking of using a tax agent we urge you to read the company’s terms and conditions on documents and websites, so you understand in advance the fees you will pay and the service you’re signing up for.
You should choose the right tax agent carefully, because even if you use a tax agent, you remain responsible for your own tax affairs.
If you’re having difficulty paying your tax bill
It’s really important to stay on top of your tax affairs, but if you are unable to pay what you owe you should talk to us as soon as possible.
Protect yourself and your information
There are many different types of scam that target businesses and the self-employed. Some offer tax rebates, while others threaten arrest. If you receive a message like this, don’t panic – take your time, and don’t be rushed into sharing any personal information.
The National Cyber Security Centre also publishes advice on cyber security for businesses of all sizes.
The Energy Bill Relief Scheme
The Energy Bill Relief Scheme will provide energy bill relief for non-domestic customers – businesses, voluntary sector organisations and public sector organisations such as schools, hospitals and care homes – in Great Britain.
Help for Households
The government is also offering cost of living support to every household.
See what cost of living support you could be eligible for including help with energy bills, transport and childcare costs: Help for Households.
